Oracle Confirms Siebel OnDemand Shift, New PeopleSoft Suite

Oracle's co-president announces that the company would rip and replace Siebel's OnDemand hosting infrastructure: Gone is IBM's infrastructure, to be replaced by Oracle's.

On the heels of second-quarter earnings announcement that showed a significant increase in application sales, Oracle made two additional applications-related announcements this week that could have an impact on the market.

Oracle co-president Charles Phillips announced June 26 during a press call that the company would rip and replace Siebels OnDemand hosting infrastructure: Gone is IBMs infrastructure to be replaced, not surprisingly, by Oracles.

At the same time, Oracle announced that its long-awaited PeopleSoft Enterprise 9 ERP suite is available—this time with a little Oracle Fusion Middleware mixed in—and is a validation that the company plans to support PeopleSofts applications indefinitely, according to Doris Wong, vice president and general manager of the PeopleSoft organization within Oracle.

Oracle acquired Siebel Systems earlier in 2006 and PeopleSoft in 2004.

The news that Oracle is moving away from IBMs infrastructure is not in itself earth shattering; rather, its a continuation of the companys long-held strategy to build out its own hosted infrastructure environment and, over time, bind Siebel and other environments to everything Oracle: the Oracle database, Oracle tools, Oracle Fusion Middleware, Oracle applications, according to Gartner analyst Michael Maoz.

Where it gets interesting is in market divisions—and alliances.

Oracles moving away from IBM puts Big Blue squarely in SAP AGs camp; its no coincidence that SAPs CRM on demand software is hosted through IBM.

"The revenue [from SAP on demand deals] might be minimal, even a loss leader, but its equivalent to a Kmart Blue Light special—it really just gets you in the store," said Maoz, in Stamford, Conn.

"You build out SAP ERP hosting and its equivalent to hosting on IBM."

An alliance between SAP and IBM could help fend off the "everything Oracle" strategy, particularly when it comes to Oracles Fusion application plans.

Its not clear yet which databases Oracle plans to support, besides its own, with its next generation Fusion applications.

A decision to support only its own database could leave some users—particularly those in the JD Edwards camp (a company Oracle acquired when it bought PeopleSoft) who are big IBM users.

Phillips said in his call that Fusion apps will include class libraries that use some features of the Oracle database.

Oracle is, apparently, still waiting on confirmation from other database vendors as to whether or not they will incorporate those features into their database software.

Richard Napier, director of business development at InFact Group, a worldwide consulting firm specializing in CRM deployments, isnt concerned with Oracles trade out of IBMs infrastructure for its own.

"The Siebel architecture…has always been platform independent from a database perspective," said Napier, in New York city.

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"I cant say with precision if any specific tuning will have an impact on the deployment on another platform, but it is not something that I would lay awake lie awake at night worrying about. Look around the world and see how many customers have deployed Siebel on Oracle, Microsoft SQL, as well as DB2."

What Napier, a Siebel OnDemand partner and customer, is looking for is more clarity on Oracles on demand roadmap—beyond the next release and into the next 12 to 18 months.

"[Oracle] should concentrate on enriching functionality only when it provides a more effective process. Functionality for functionality sake never did anyone any good," said Napier.

"In the short term…I would love to see more Custom Objects, more Web services to extend into the wider enterprise, and some key data access improvements (for handling Opportunities for example), and the implementation of Multi-value lists….That would really make some of our customers happy."

Oracle plans to migrate its existing Siebel CRM OnDemand customers off of IBMs stack and onto its own over the summer. Any new customers are already running on Oracle.

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